AN ACT TO AMEND TITLE 25 OF THE DELAWARE CODE RELATING TO COMMON INTEREST OWNERSHIP.

This Act corrects several technical and typographic errors in the Delaware Common Interest Ownership Act (the “DUCIOA”) and makes a number of non-controversial changes agreed upon by the Common Interest Community Advisory Council and representatives of builders, real estate sales professionals, association managers, and owners. Section 1. This section amends Section 2246 to correct the inadvertent omission of “not” in the Unit Property Act clarifying that exclusively nonresidential condominiums are not required to maintain a repair and replace reserve. Section 2. This section amends Section 81-116(a) to clarify the original intent of the DUCIOA, which exempts nonresidential common interest communities. Section 3. This section amends Section 81-119 by adding five sections of the DUCIOA to apply to pre-existing communities through section 81-119 as follows: §81-217 (i): consent of holders of security interest are deemed to have granted approval of amendments to the declaration if they do not refuse consent in writing after notice. §81-306: Bylaws. §81-308A: executive board meetings are open to members after the period of declarant control. §81-310: voting proxies and voting by ballot without a meeting permitted. §81-314: surplus funds remaining after payment of expenses and prepayment of reserves, returned to owners. This section also clarifies that a conflict between a preexisting document and DUCIOA in any common interest community is resolved in favor of the preexisting documents, whereas the prior language specified application only to condominium and cooperatives. Section 4. This section amends Section 81-217(i) to clarify a common ownership community’s ability to amend its governing documents. Section 5. This section amends Section 81-217(m) to add a new subsection which allows Declarants or the Council to correct typographical errors efficiently and easily, by deeming consent to amendments by security interest holders after notice. It follows the procedures in the DUCIOA for obtaining lenders’ consent to actions and amendments to apply to existing common interest communities. Section 6. This section amends Section 81-303(a) to clarify that under Delaware corporate law there is no distinction between the duties of a director or officer of a for-profit corporation and those of a director or officer of a non-profit corporation. Section 7. This section amends Section 81-303(c) to allow termination of the period of declarant control as permitted in the declaration. Section 8. This section amends Section 81-310(a) to expand the options and methods for owner voting. Section 9. This section amends Section 81-316(h) to add language that allows a community to charge a reasonable fee to provide required certifications regarding the community and limits the liability of a voluntary association for inadvertent errors. Section 10. This section amends Section 81-316(j)(1) to add a comma to correct a typographical error in the existing statute. It clarifies that mortgages can be foreclosed upon by law processes, equity processes, or as provided in the governing documents. Section 11. This section amends Section 81-318(e) to add language that clarifies the right of the association to charge a fee, in advance, to the unit owner when the unit owner has requested conversion, inspection, or copying of association records. Section 12. This section amends Section 81-324(a) to add language that clarifies that voting at a budget meeting may be by proxy as well as in person. Section 13 This section amends Section 81-408(a). Currently, the DUCIOA limits the right to cancel for failure to supply a public offering statement to purchasers of condominiums and cooperatives. Changes to this section conform subsection (a) to UCIOA and clarify the date for cancelation of purchase contracts. Section 14. This section amends Section 81-409(b) to limit the liability of the Association for inaccurate information provided by the property manager in fulfillment of the requirement to provide information to complete a resale certificate. In the alternative, it declares providing false information is a per se violation of the Consumer Fraud Act, which allows a private right of action to recover damages and punitive damages against “merchant” sellers.